Clinical Data: Bulls and Bears Round Two

Clinical Data's new antidepressant is approved but bulls want the company to be sold for an even higher premium while bears say any deal is unlikely.

NEWTON, Mass. ( TheStreet) -- Clinical Data ( CLDA) scored a big victory with the approval of a new antidepressant, sending the stock price soaring 68% to $25.17 on Monday. Many of the company's shareholders and supporters, however, are looking for an even bigger payday when Clinical Data sells itself to the highest bidder.

A sale of Clinical Data is seen as an obvious and inevitable next step, many current shareholders believe, because the company's new antidepressant Viibryd is a $2-3 billion-a-year blockbuster that will prove irresistible to any of the large pharmaceutical firms desperate for new growth.

Clinical Data bulls are doubly confident in a sale because they have Randall J. Kirk on their side of the negotiating table. Kirk, Clinical Data's chairman and largest shareholder with a 37% stake, is known as a consummate dealmaker. He became a billionaire after selling New River Pharmaceuticals to Shire ( SHPGY) for $2.6 billion in 2007, but previous to that, he had a hand in Johnson & Johnson's ( JNJ) $2.3 billion purchase of Scios in 2003.

At Monday's close and using a fully diluted share count, Clinical Data is worth over $1 billion already even with Viibryd still three or four months away from a commercial launch. Yet, bulls like Wedbush Securities analyst Greg Wade believe the company could be bought for upwards of $2 billion, or $40-plus per share. An institutional investor in Clinical Data who asked to remain anonymous believes Clinical Data is worth more, perhaps as much as $60 a share.

Nonsense, say Clinical Data bears, including short sellers who initiated positions Monday on the stock's run-up following Viibryd's approval. To the bear's eye, Viibryd is me-too antidepressant with tolerability issues of its own. Sure, the $12 billion U.S. antidepressant marketing is attractive but cheap generics are grabbing a larger share of the market and insurers will throw reimbursement roadblocks in Viibryd's way. Clinical Data will be lucky to do $300 million in peak Viibryd sales, the bears say.

And while Kirk's money-making M&A track record is undeniable, bears say Shire was an obvious and desperate buyer for New River. With Viibryd, Kirk faces a tougher challenge and no obvious or desperate buyers. This makes Clinical Data look more like Savient Pharmaceuticals ( SVNT) or Vanda Pharmaceuticals ( VNDA) -- two small drug companies with stocks that spiked on drug approvals only to fall sharply in the following weeks and months. The former couldn't find a buyer and was forced to sell its gout drug solo; the latter found a partner, Novartis, to market its schizophrenia drug but so far, hardly anyone is prescribing it.

Cheng Yi Liang, a chemist with the U.S. Food and Drug Administration, was charged by the Securities and Exchange Commission with insider trading on information regarding upcoming FDA drug approval decisions on Tuesday.